Financial Metric Definitions

Low Risk

Moderate Risk

Potentially High Risk

1. Current Ratio

Current Ratio is a measure of operational efficiency and shortterm financial health. CR is calculated as current assets divided by current liabilities.

>= 1.5

Between 1.0 (inclusive) and 1.5

< 1.0

2. Unrestricted Days Cash (Prior to FY14)
Applies to 5year average

The unrestricted days cash on hand ratio indicates how many days a school can pay its expenses without another inflow of cash. Calculated as Cash and Cash Equivalents divided by ([Total ExpensesDepreciated Expenses])/365).
Note: This is based on quarterly tuition payment schedule.

>= 75 days

Between 45 (inclusive) and 75 days

< 45 days

2. Unrestricted Days Cash (FY14 forward)

4th quarterly tuition payments to Commonwealth charter schools in FY14 were made after June 30, 2014, which resulted in lowerthantypical cash at fiscal year end, affecting the risk levels for the current ratio and unrestricted days cash indicators for FY14 on a onetime basis. Payments for FY15 and after are made on a monthly basis, and parameters for risk have been adjusted accordingly.

>= 60 days

Between 30 (inclusive) and 60 days

< 30 days

3. Percentage of Program Paid by Tuition

This measures the percentage of the schools total expenses that are funded entirely by tuition. Calculated as (Tuition + InKind Contributions) divided by Total Expenses (expressed as a percentage). Note: InKind Contribution are added to the numerator in this ratio to balance out InKind Expenditures which will be captured in the Total Expenses in the denominator, and ratios over 100% are set to 100%.

>= 90%

Between 75% (inclusive) and 90%

< 75%

4. Percentage of Program Paid by Tuition & Federal Grants

This measures the percentage of the schools total expenses that are funded by tuition and federal grants. Calculated as (Tuition + InKind Contributions + Federal Grants) divided by Total Expenses (expressed as a percentage). Note: InKind Contribution are added to the numerator in this ratio to balance out InKind Expenditures which will be captured in the Total Expenses in the denominator, and ratios over 100% are set to 100%.

>= 90%

Between 75% (inclusive) and 90%

< 75%

5. Percentage of Total Revenue Expended on Facilities

This measures the percentage of Total Revenue that is spent on Operation & Maintenance and NonOperating Financing Expenses of Plant. Calculated as Operation & Maintenance plus NonOperating Financing Expenses of Plant divided by Total Revenues (expressed as a percentage).

<= 15%

Between 15% and 30% (inclusive)

> 30%

6. Change in Net Assets Percentage

This measures a school's cash management efficiency. Calculated as Change in Net Assets divided by Total Revenue (Expressed as a percentage).

Positive %

Between 2% (inclusive) and 0%

< 2%

7. Debt to Asset Ratio

Measures the extent to which the school relies on borrowed funds to finance its operations. Calculated as Total Liabilities divided by Total Assets.

<= .9

Between .9 and 1 (inclusive)

> 1

FY12 MA AVG Column

All financial metrics indicated in this column are a result of each ratio calculated using statewide totals. For Enrollment, Total Net Assets and Total Expenditures rows, these numbers are averages calculated using the statewide totals of all charter schools’ data.



